Area’s economy stable mid-2026 – Scranton Times-Tribune

Northeast Pennsylvania’s economy is stable, with an unemployment rate hovering close to that of the state. Top industries such as healthcare, logistics and manufacturing are seeing employment growth.

However, job growth may slow in the coming year to lower rates than in recent years — similar to the state as a whole — as jobs are filled, according to Jill Avery-Stoss, president and CEO of The Institute, a Wilkes-Barre-based data analysis, research and consulting organization.

“As businesses are adding new jobs to the market and those particular jobs are filled, hiring slows,” Avery-Stoss said. “It’s not just Northeastern Pennsylvania, it’s following a national trend.”

She added that the growth the area experienced so far in 2026 was not as much as in the past couple of years.

The Institute’s economic data is based on a report by Lightcast, a software system that generates economic reports for the organization. The report includes economic data for 12 counties — Bradford, Carbon, Columbia, Lackawanna, Luzerne, Monroe, Pike, Schuylkill, Sullivan, Susquehanna, Wayne and Wyoming.

John Augustine, president of Penn’s Northeast, speaks during a conference about data centers in Northeast Pennsylvania sponsored by Penn’s Northeast at DoubleTree by Hilton in Plains Twp. on March 13, 2026. (Submitted Photo)

John Augustine III, president and CEO of Penn’s Northeast, a Pittston Township-based regional economic development agency, is seeing a slowdown in the local economy overall.

“I can tell you the economy locally has not been growing as fast as it has since COVID,” Augustine said. “We’re seeing a slowdown over the last year in national leads and a heavy decrease in international leads.”

He said the war in the Middle East is a factor and tariffs continue to be an issue, mostly because they change constantly.

“There’s no stability when it comes to that,” he said. “Foreign companies are sitting on the sidelines waiting to invest in the United States.

“We’re not in a recession but close to it.”

Augustine said the country is in a K-shaped economy — the upper class is continuing to grow, while the lower and middle classes are moving toward the bottom.

“The warning signs are there and they’re growing,” he said.

He said Americans owe over $1 trillion in credit card debt, which is over $500 billion more than what they owed after the pandemic.

“The rich are getting richer, the middle class is eroding,” Augustine said.

But, he added, it is not all doom and gloom.

“I think there are opportunities in various industries,” he said, citing artificial intelligence (AI). “One thing is we have seen an increase in wages, though not as fast as inflation.”

Jobless rate still low

Avery-Stoss said Northeast Pennsylvania’s unemployment rate is hovering near the rate of the commonwealth (4.4 percent and 4.2 percent, respectively, as of April). There is also employment growth in top industries such as healthcare, logistics and manufacturing.

Despite some fluctuation throughout the past year, NEPA’s unemployment rate is at the same level it was a year prior – and labor force participation is higher, she said.

“Conditions are similar for the state as a whole, though some indicators suggest that employment growth in the near future may be a bit sluggish – occurring at lower rates than in recent years,” Avery-Stoss said.

Iordanis Petsas, Ph.D., chair and professor of The University of Scranton’s Department of Economics, Finance and International Business, said the local economy currently is stable due to continued growth in in manufacturing, logistics and especially healthcare.

But, Petsas said, businesses must keep up with technology to sustain growth, especially as workers age out of positions.

“The region continues to attract investments,” he said. “That’s because of the location.”

“Location is a significant factor in the regional economy. Being situated in proximity to major highways such as Routes 80 and 81 is a key element for warehousing and logistics,” Avery-Stoss commented. “The region’s anchor institutions are also major economic drivers. These institutions include hospital systems as well as colleges and universities. They provide valuable services to the community and they are large employers. Tourism, hospitality and recreation are also strong, and cost of living is relatively favorable.”

“We’ve seen wage growth (since last year), we’ve also seen business expansion,” Petsas said, adding, though, “Growth has become more selective. There is more demand for industrial space.”

He said there also is a focus on automation and expansion of healthcare employment.

“Business in general remains more cautious,” he said.

AI impact

AI will be a factor in future growth, especially as it leads to more automation. Petsas said businesses will have to embrace it to keep up.

Avery-Stoss said, though, proposed data centers currently are not impacting the local economy.

“Once data centers are constructed, they will have a bigger contribution (for business),” she said. “Since they won’t add much to employment, there is not much impact as far as employment.”

Augustine said that with the rapid growth of AI, so many companies are implementing it. “Obviously, we need data centers to handle all the computing power,” he said.

But, he added, there are positives and negatives.

“On the positive side, there are tremendous job opportunities in building these buildings over a period of time,” Augustine said.

He said one data center building, once it is built, may employ 20 to 25 people paid an average yearly salary of $88,000. With about 36 proposed data center projects in Northeast Pennsylvania, that could mean thousands of jobs over the next 10 years.

But many people have environmental concerns about the noise, amount of water the centers use for cooling, and how much electricity is needed to power them.

“They will be a part of our local economy,” Augustine said, adding future options for their location will be in the ocean or in outer space.

Options for powering the facilities may include hydrogen or small nuclear reactors.

“Locally, it’s something we need to be aware of, as long as they are not to the detriment of our residents,” he said.

Rising prices, on the other hand, are playing a bigger role right now.

“Inflation absolutely does have an impact,” Avery-Stoss stated. “Northeast Pennsylvania historically is a good cost-of-living region, but wages are not rising as fast as inflation.”

She said there still are uncertainties related to tariffs, but even the potential for tariffs to change can impact an area, such as the stock market.

Pa. economy strong

Despite uncertainty in some areas, Pennsylvania has the strongest economy among the Northeast U.S. states.

According to the state Department of Community and Economic Development (DCED), Pennsylvania is the only state in the Northeast United States with a growing economy, based on an analysis done by Moody’s Analytics Chief Economist Mark Zandi. Last year, according to a new analysis of data from the U.S. Bureau of Labor Statistics, the commonwealth ranked third in the nation for job growth, DCED also reported.

A big factor in that is the state’s energy sector, including mining, quarrying, and gas and oil extraction, according to Avery-Stoss.

“What also make (the state) strong are data centers, warehousing, healthcare,” she said. “Even our manufacturing sector is doing well. We have a strong blue collar workforce, technical institutions are really active.”

Avery-Stoss expressed concern, as did Petsas, that the working age population is aging out.

“It’s more important for us to replace workers,” she added.

Augustine agreed Pennsylvania is doing well, scoring high impact wins with companies expanding or looking to invest. He added chambers of commerce and other groups in Northeast Pennsylvania have done a good job of building a diversified economy.

“(Businesses) don’t feel the ebbs and flows as strong as some other areas,” he said.

Preparing for the future

Avery-Stoss said long-term economic health will depend on factors such as workforce readiness and the availability of promising career pathways, as well as the region’s ability to adapt to demographic change, such as an aging population, and new technologies, such as the emergence of automation and AI.

“There are plenty of things businesses can do to prepare for uncertainties,” she advised.  “Scenario-planning is an important step. Business leaders should have strategies for periods of economic stability, but they should also think about ways to pivot amid downturns – navigating supply-chain disruptions or declines in demand, for example. Conversely, there should be growth goals for favorable economic conditions, such as increasing demand or market expansion.

“Business leaders should also prepare for AI adoption and they should focus heavily on workforce retention – not just recruiting and hiring.”

Petsas said the next phase of growth will involve technology information companies investing in technology, specifically AI.

He said many distribution centers are utilizing AI.

“What drives the growth is cost,” Petsas said. “You need to deal with advanced manufacturing, robotics engineering.”

He said a labor shortage can accelerate reliance on AI robotics.

“What the challenge is here is to do it right,” he said.

“AI and information in general are transforming the way of doing business,” Petsas said. “There are growth opportunities. Businesses should focus on the positives.”

“I think there’s opportunity for all businesses,” Augustine said. “A lot of businesses are sitting on some cash. This is a time in the economy to basically tighten your belt, certainly not overspend. I would ride a hopefully stable economy and hope for growth, which I hope will be next year. Not to say the sky is falling, it’s not all doom and gloom. Things will get better.”

FAST FACTS

• As of 2025, the region’s population increased by 1.3% since 2020, growing by 15,576. Population is expected to increase by 1.2% between 2025 and 2030, adding 14,658.

• From 2020 to 2025, jobs increased by 7.7% in 12 Pennsylvania counties from 473,553 to 510,124. This change fell short of the national growth rate of 10.6% by 2.9%. As the number of jobs increased, the labor force participation rate decreased from 60% to 58.7% between 2020 and 2025.

• Concerning educational attainment, 15.6% of the selected regions’ residents possess a bachelor’s degree (6.2% below the national average), and 10.2% hold an associate degree (1.3% above the national average).

• The top three industries in 2025 were restaurants and other eating places, warehousing and storage, education and hospitals.

• Regional average earnings per job are $22.7K below the national average earnings of $89.4K per job.

SOURCE: THE INSTITUTE